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Revisiting the Trust-performance Link in Strategic Alliances

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Abstract

  • We extend research on the trust-performance link in strategic alliances (SAs) by arguing that the traditional focus of research on the influence of trust on performance of SAs needs to be complemented with a more explicit acknowledgment and analysis of the role that SA performance plays in the development of trust.

  • Drawing on existing theoretical arguments and empirical findings related to the consequences and determinants of trust we argue for the existence of a bidirectional causal relationship between trust and performance in SAs. We empirically test this bilateral relationship using 3-stage least square regression models on data from 110 strategic alliances.

  • Our results support the positive effect of SA performance on trust, but not the commonly stressed positive effect of trust on SA performance. We discuss the relevance of this finding for the theory of inter-firm collaboration. We conclude by discussing the implications of our findings for practitioners and scholars interested in SAs.

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Acknowledgment

We would like to thank one of the reviewers for stressing the importance of controlling for this variable in our analysis.

We would like to thank the two anonymous reviewers for highlighting the potential effect of these variables.

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Correspondence to Alexander T Mohr.

Appendix: Measures

Appendix: Measures

Performance (alpha = 0.89) (Strongly Disagree 1–5 Strongly Agree)

  1. 1.

    We are satisfied with the profitability of the JV.

  2. 2.

    We are satisfied with the growth of the JV.

  3. 3.

    We are satisfied with the market share of the JV.

  4. 4.

    We are satisfied with the overall performance of the JV.

Trust in partner firm’s representatives/managers (alpha 0.86) (Strongly Disagree 1–5 Strongly Agree)

  1. 1.

    Our partner firm’s representatives adhere to our agreements.

  2. 2.

    The words and actions of our partner firm’s representatives frequently differ (reverse coded).

  3. 3.

    Our partner firm’s representatives have an interest in our side achieving its goals.

  4. 4.

    Our partner firm’s representatives actively help us to achieve our goals.

  5. 5.

    Our partner firm’s representatives have the capabilities necessary for the successful management of the JV.

  6. 6.

    Our partner firm’s representatives take appropriate decisions regarding the management of the JV.

Trust in partner firm as a whole (alpha 0.86) (Strongly Disagree 1–5 Strongly Agree)

  1. 1.

    Our partner firm adheres to the JV agreement.

  2. 2.

    The words and actions of our partner firm frequently differ (reverse coded).

  3. 3.

    Our partner firm has an interest in our side achieving its goals.

  4. 4.

    Our partner firm actively helps us to achieve our goals.

  5. 5.

    Our partner firm has the capabilities necessary for the successful management the JV.

  6. 6.

    Our partner firm takes appropriate decisions regarding the management of the JV.

Control Variables

Complementarity (alpha 0.78) (Strongly Disagree 1–5 Strongly Agree)

The partners’ goals are complementary.

The partners’ resources are complementary.

Environmental dynamism (alpha 0.72) (Strongly Disagree 1–5 Strongly Agree)

The JV operates in a very competitive environment.

The environmental conditions change quickly.

The environmental developments in the environment are unpredictable.

Strategic Control (alpha 0.87) Please state the extent to which you exert control over the following issues (low level of control 1–5 high level of control)

  1. 1.

    Strategic Planning

  2. 2.

    Distribution of profits/losses

  3. 3.

    Re-investment decisions

  4. 4.

    Filling of key management positions in the JV

JV size (measured by number of employees)

Prior relationship (measured by the length of prior business relationship in months and in cases where there was no prior business relationship by the duration of negotiations in months)

JV Age (measured in years)

IJV Side (measured using a dichotomous variable with 0 for German side representative and 1 for Chinese side representative)

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Mohr, A., Puck, J. Revisiting the Trust-performance Link in Strategic Alliances. Manag Int Rev 53, 269–289 (2013). https://doi.org/10.1007/s11575-012-0145-0

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